Budget Speech
By Leader of the Opposition, Mohtarma Benazir Bhutto
June 15, 1998

Ladies and gentlemen,

As I address the National Assembly in the first budget session after
Pakistan joined the nuclear club, I recall the words of our founder.
Fifty years ago Quaid-e-Azam had prophesied “Pakistan has come to
stay”. Quaid-e-Awam Zulfikar Ali Bhutto gave us the nuclear
technology to fulfill that prophecy in the face of Indian
intransigence.

The facility at Kahuta where Pakistan developed its nuclear
capability was established by Prime Minister Shaheed Zulfikar Ali
Bhutto who was warned of being made a “horrible example” and finally
assassinated. Dr. Abdul Qadeer Khan and the Pakistan Atomic Energy
Commission working under Prime Minister Bhutto’s instructions with
their teams fulfilled the mission given to them. We always hoped
that India and Pakistan would make the sub-continent a nuclear free
zone. Those dreams were shattered by the Indian explosion. We must
ask: “Why”?

For more than 20 years, when the Kahuta Laboratories were
established in 1976 and the five Indian nuclear tests of May 11,
1998, India was restrained from testing nuclear weapons by a
vigilant Pakistan. We ask what were the circumstances emboldening
the Indian government to defy world opinion.

The answer lies in the policy of APPEASEMENT, adopted by Nawaz
Sharif towards India so that he could concentrate on his internal
enemies. Benazir replaced Kashmir as Pakistan’s foreign Policy.
Principles were abandoned. People of Kashmir were abandoned. All
morals were abandoned.

India had larger markets to offer the Ittefaq regime, which had
already cornered the sugar, textile, fertilizer, cement, and banking
sector of Pakistan. So the son was sent as a special envoy. The
Indians sensed the weakness of the new Pakistani leadership. They
tasted its commercial flavour. And they took Pakistan and the world
by surprise.

The Indians calculated they had nothing to lose. The Americans had
brought the Soviet Union to the point of disintegration by upping
the ante. India decided to up the ante. If they detonated, Pakistan
would be forced to detonate. They calculated that if Pakistan did
not detonate, they could attack Azad Kashmir. If Pakistan did
detonate Pakistan’s weak industrial base and mismanagement of the
economy dominated by Motorway kickbacks would lead to an internal
explosion.

The policy of appeasement led to its logical conclusion.

Today Pakistan is facing the gravest threat to its security since
the fall of Dacca.

I had been warning of this internal, economic threat time and again.

The budget speech gave an impression of Business As Usual in stark
contrast to the speech by Nawaz Sharif a day earlier. The reality is
that since the dismissal of the PPP government on November 4, 1996,
Pakistan has slipped into anarchy and chaos. Today we stand
internationally isolated, politically divided and economically
bankrupt.

The Finance Minister failed to tell the Nation
why:

The Nawaz regime had rolled back the frontiers of
the free market economy;

What the effects of sanctions would be;

How these would be met,

How much aid flow was affected;

Whether Pakistan would default and declare a
moratorium on further debt repayment;

How the de-dollarisation of the economy would
affect money supply, the value of the rupee and inflation;

The Budget for 98-99 did not indicate how we would
reduce debt and become self-sufficient.

Instead of building up a climate of confidence and understanding,
the regime has willfully created panic, fear and disharmony. The
measures taken by the regime to destabilize Pakistan include:

The declaration of Emergency suspending all human
rights;

The confiscation of foreign currency;

The declaration to build a controversial Dam
alienating three of the four federating units;

Misappropriation of public money to pursue a
political vendetta

Mr. Nawaz Sharif came on TV to announce a
so-called “National Agenda”.

He came across as desperate man making wild and
unrealistic empty promises. He had nothing to offer the Nation. He
talked of:

Land Reforms of 1977 which have already been implemented except by
the collaborators of the Martial Law regime. He refused to give up
the 1700 acres in the heart of Raiwand, which he and his family have
grabbed in violation of the land reforms of 1977. They have robbed
Rs. 70 crores to build a canal of water there and rupees 2 billion
from WAPDA to import and build an uninterrupted water supply. This
is a gross abuse of power and the resources of the state for which
he will have to account;

He promised to give loans of Rs. 350 lacs to the un-employed knowing
the money was not there;

He promised to build Kalabagh Dam without disclosing where the money
was to come from;

He asked the nation to drink half a cup of tea and use one spoon of
ghee while his regime relaxed rules for the import of luxury items
such as air conditioners and expensive cars for Redco’s benefit;

His personal agenda came to the fore when he said the former Prime
Minister had caused him losses by refusing to give railway wagons to
the ship “Jonathan” carrying scarp. He hid the fact that he had
abused his position under General Zia to construct a dry port at
Ittefaq Foundries and got Pakistan Railways to transport scrap at
concessional fees, causing Pakistan Railways a loss of Rs. 2 lacs
per train (see Annex I of “The Dawn” July 22, 1989)

He hid the fact that he made money out of the “Jonathan” incident
when he got compensation of about 8 crores of public money by a
court process where the defence and state had colluded;

He declined to tell the Nation that he had taken Ittefaq Foundries
for free under a Martial Law Regulation with the assets in tact and
the liabilities written off. He failed to mention that it was an
iron mongery before nationalization.

He failed to tell the nation he had plundered billions of rupees to
build himself scores of factories in three years, of how he had sold
600 plots in one evening to make a packet, of how he had bought up
land at Raiwand at throwaway prices and then declared it an
industrial estate;

He failed to tell the nation that he has embezzled about Rs. 1
billion to malign the Leader of Opposition for exposing his fraud,
corruption, misconduct and abuse of office.

He failed to tell the people that he was scandalizing the
pre-shipment firms because they had discovered $650 million of
uncollected customs dues. (see Annex 2)

The people want Nawaz Sharif to return the 1000 crores that he has
plundered. Returning 2 or 3 debt ridden assets with a view to
plunder the rest will not do. The people know that there were no
engineered defaults. These are engineered excuses to hang on to
ill-gotten wealth. The people cannot be expected to make sacrifices
when the rulers are bent upon keeping ill-gotten assets even at a
time of national crisis.

The combined expenditure of the Prime Minister’s Secretariat, the
President’s Secretariat, the National Assembly, the Senate and the
Supreme Court of Pakistan doesn’t come to the amount that defaulter
Nawaz Sharif and his gang of defaulters is lavishly spending in its
criminal conspiracy internationally to malign the leader of the
Opposition who happens to be the twice elected Prime Minister of
Pakistan and the architect of its Missile Technology.

The Pakistan Peoples Party demands that:

A judicial commission inquiry into the corruption allegations
against Nawaz Sharif, his family and his cronies.

A judicial commission identifies all state funds usurped, embezzled
and unlawfully taken for the personal vendetta against the leader of
opposition.

This money belongs to Pakistan. Our people will take it back, every
paisa from Nawaz Sharif and his henchmen. How dare he take money
from the pockets of the poor people of Pakistan to squander on
detectives, propaganda and forgery against his political opponents?

Suitcases of dollars are given to members of Ehtesab Bureau.

A chain of information centers have been set up world wide for the
propaganda war against the champion of democracy and rule of law to
leave the Nation leaderless in its hour of crisis. The people for
the forces of truth will defeat this sinister campaign by savage
tyrants for justice can not be for ever denied.

While our people drink a half-cup of tea, the Ministry of
Information eats barrels of cash in its propaganda war. These
include:

Demand No. 64 for information of Ministry of Information
Rs. 76,779,000 Last year Rs. 73,674,000 was spent on “Publicity”

Demand No. 65 for documentaries of Information Ministry
Rs. 31,799,000 Last year Rs. 37,896,000 was spent on “Publicity”

Demand No. 66 for information Department of Information Ministry
Rs. 85,522,000 Last year Rs. 94,423,000 was spent on “Publicity” and
“Recreation”

Demand No. 68 for other expenditure of information Ministry
Rs. 588,683,000 Last year Rs. 105,065,000 was spent on “Publicity”

Demand No. 129 for development of information Ministry
Rs. 25,400,000 The whole amount was allocated for “Publicity” Total
Rs. 895,588,000/-

This comes to a staggering sum of nearly one billion rupees.

The expenditure on the entire state machinery comes to half that :

Prime Minister’s Secretariat

Rs. 98,457,000

The Supreme Court

Rs. 69,559,000

The President

Rs. 74,666,000

The National Assembly

Rs. 250,439,000

The Senate

Rs. 111,240,000

TOTAL

Rs. 604,361,000

It is nothing but a cruel joke for defaulter Nawaz Sharif to come on
TV and say that he will leave the Prime Minister Secretariat. The
cost of all the main institutions, including the Presidency, the
Prime Minister Secretariat, the Supreme Court, the National Assembly
and the Senate is less than the ill-gotten expenditure on the
propaganda war against the Leader of Opposition.

This cost excludes the ill-gotten money spent on:

Ehtesab Bureau and its secret expenditure;

Law Ministry’s expenditure on lawyers and accountants;

Intelligence Bureau’s expenditure through secret services funds;

Prime Minister Secretariat expenditure through secret services
funds;

The divisive policies of the regime are sabotaging the progress and
prosperity of the Nation.

The poor grow poorer. The middle class cannot make ends meet.
Government employees lack job security. Labour can hardly make ends
meet. Shops are starved for customers. Foreign investors have been
threatened and scandalized. Bureaucrats and Bankers vilified. No
institution has been left with respect or sanctity. There is
discontent and disillusionment. The people feel cheated and angry.
Hunger stalks the land. Young people commit suicide because they
cannot make ends meet.

And we spend one billion rupees on propaganda.

Considering the grave crisis threatening the very existence of
Pakistan, we expected the Finance Minister to announce austerity
measures. This was not done.

The Federal government has grown too large. The time has come for us
to live within our means. The Peoples Party calls for a real cut in
federal expenditure. This means doing away with unnecessary
ministries, divisions and buildings. This means transferring
government to the provinces and to the districts. This means
devolution. It means trusting the people.

The Peoples Party began the process of district government by
creating Social Action Boards consisting of elected members at the
district level. The Social Action Boards did remarkable work
building 30,000 primary schools in 3 years, launching a campaign to
iodize salt, eliminate polio, reduce the population growth rate and
grow trees to protect the environment.

It is not enough to transfer resources to the provinces alone which
have become bloated. We call upon the Federal government to transfer
social and local issues to the provincial governments who ought to
be mandated to re-distribute 50 to 60% of their resources, according
to population to the districts. Each district should have a board of
elected members to run programmes of poverty alleviation as a
prelude to district government.

The Universities and Hospitals on Federal government grants must be
directed to come up with self-sufficiency plans while maintaining a
safety net for the poor and the children of the poor. The
Universities, Hospitals and institutions must be allowed to keep the
money they charge as fees and not send it to the Center.

The Supreme Court and High Courts must be allowed to keep court fees
so that they can provide justice freely and expeditiously.

The proceeds of General Sales Tax must go to the provinces as
originally envisioned in the Constitution. A percentage may be
donated by the provinces to the Center earmarked for Baluchistan,
Northern Areas, FATA and Azad Kashmir.

Debt incurred on different provinces must be assumed by those
provinces for repayment. We cannot expect Baluchistan to bear the
cost of the extravagant Motorway.

We cannot expect people of one area to subsidize the electricity
charges of other area.

The fall in oil prices should be passed on to Wapda and the Thermal
Power Plants. This will make Wapda solvent and reduce the charges of
electricity.

Each Area Board should have a different rate of electricity charges
based on cost of production. This will lead to greater efficiency
and better rates for better customers who pay their bills. Wapda’s
old thermal plants are oil guzzlers producing expensive electricity.
These should be shut down and cheaper power obtained from the
private power projects.

Our Country is calling out for drastic Reforms. The old ways will
not do. This regime has squandered the massive engineered majority
given to it by President Farooq Leghari in a deal brokered by
Governor of the Punjab. It has miserably failed to chart out a
course of self-reliance and reform. Women’s seats have not been
restored. Minorities have not been given joint electorate. Blasphemy
Law has not been amended.

The projects pertaining to Water logging and salinity have been
abandoned which has slowed down growth. Growth figures are
constantly adjusted. Last years (for 96-97) we were told growth rate
was 3.1%. This has now been revised to 1.1%. This year and next
years growth target will be re-adjusted too, as there is simply no
growth, except in the population sector.

It is incorrect to state that industry has grown by 6%. Ironically,
only good crops in the agriculture sector helped industries dealing
with primary commodities. For example sugar due to a good sugar cane
crop and jute bags due to a good rice crop.

However, steel, fertilizer, chemicals all went down exposing the
so-called growth rate of 6% as a fraud. Investment has gone down too
as admitted by the finance minister. Only the ICI, Engro and other
projects of PPP, including power sector, continue towards
completion. Otherwise the regime has returned with IOUs and not MOUs,
despite an expenditure of nearly rupees one billion on the Prime
Minister’s fruitless and barren travels.

Cement production, steel production and import of machinery has all
gone down exposing a stagnant economy.

Debt servicing is likely to hit Rs 300 billion as compared to the
figure of Rs 276 billion reflected in the Budget.

Prosperous public sector corporations have lost Rs 50 billion during
the current year.

External loans of Rs 142 billion promised by the Budget are going to
be impossible to raise.

The provinces are starved for funds having received Rs. 19 billion
less than promised last year in the federal Budget as their share.
Next year looks no more promising.

To dupe the IMF, Rs. 9 billion excess tax has been collected from
Habib Bank and National Bank. The Chairman FPCCI has claimed that Rs
15 billion of refunds etc have been withheld by the CBR presumably
to doctor figures.

The regime has decided to buy dollars at 9% premium by announcing
that any Pakistani remitting $100,000 legally will receive relief of
Rs 4 lacs . This will further erode the value of the rupee.

The Stock exchange whose main aim is to mobilize capital has
crashed. In the PPP days there would be 10-15 new issues annually.
The Bad - Kismet Nawaz era has produce only one issue in the Karachi
Stock Exchange in the last one year.

Poverty alleviation programs have been badly affected. The public
sector programme is meant for the down trodden segment of the
society and the backward area of Pakistan. The expenditure on PSDP
i.e. poverty alleviation has gone down from 5% of GDP to 3% GDP.

We reject the claim that inflation has fallen to 8%. With a massive
increase in price of lentils and a 30% increase in price of wheat,
inflation has climbed to new heights.

The deficit has risen to nearly 7% if not more. The rupee has been
devalued by 10% with more to come in the following months.

Exports have increased by a miserable 5% and that too, due to
agriculture and good weather.

Bank default and bad debt has risen from Rs. 121 billion to Rs. 150
billion despite giving bank managers discretion to write off the bad
loans of the Ittefaq family and friends.

Privatization has come to a grinding halt. Share prices of public
sector corporations have fallen drastically. PIA does not have money
to pay salaries. Share price of PSO has fallen from nearly Rs. 500
to a paltry Rs. 75. Sui Gas and OGDC are bankrupt.

Debt repayment has increased tremendously as the figures below show:

95-96 $22.275 billion
96-97 $25.00 billion
97-98 $25.00 billion

Yet not a single measure for austerity

Not a single measure for self reliance

Not a single measure for poverty alleviation

Not a single measure for debt reduction

Contrary to breaking the begging bowl, the Nawaz
regime has expanded the begging bowls that go around. We beg from
friendly countries, from overseas Pakistani in Manchester,
Birmingham and else where. We beg even from our school children who
can not afford a glass of milk a day.

Sir,

It gives me no pleasure to throw back at the finance minister his
pious promises of one year ago. The treasury benches have failed to
:

ensure a society free from provincialism

improve the lives of common man

reduce dependence on others;

generate health, education and employment
facilities,

modernize our industrial sector;

create stability and confidence;

promote growth;

eradicate corruption and mismanagement;

build forex reserves;

allow stock exchanges index to increase;

encourage foreign investment;

increase revenues;

control government expenditure;

take stern action against defaulters;

ensure better law and order;

expand exports to 15%;

create job opportunities;

provide green tractors and green tube-wells;

reduce tax rates;

drop custom duty to 45%;

Never before in the history of Pakistan has so much
damage been done to the national economy in such a short time.

The PPP had:

Given the country the lowest deficit – 5%,

Reduced debt for first time in Nation’s history by repaying
principal amount through privatization proceeds;

It is all very well to shed crocodile tears but sacrifices like
charity, begins at home. May I ask how much income tax the Prime
Minister paid during 1997-98? Or his cronies? His Cabinet?

Instead the government pounced upon the unsuspecting middle class
holders of foreign exchange deposit. Freezing eleven billion dollars
was a criminal breach of trust, which amounted to confiscation of
property. Earlier the Nawaz regime had subjugated the economy to its
partisan political purposes by scandalizing the Independent Power
Producers (IPP’s) asking them to admit paying bribes or else face
contract cancellations. And when the Nawaz regime sought to enter
the Energy market, the staff of Hubco, one of the leading shares on
the Karachi Stock Exchange were arrested so that share prices should
fall and be picked up by the economic vultures in the regime. The
crash of the Hubco shares led to a slump in the Karachi Stock
Exchange, which crashed below the 1000 index.

What a fine way, to drive away foreign investors and destroy one’s
own economy.

There is more to come. The annual Japanese assistance of about 500
million dollars the World Bank assistance of 750 million dollars and
the remaining tranches of 1.6 billion dollars committed by IMF will
dry up.

Public confidence in the regime is so low that I demand on behalf of
the people that the detail of the remittances of $ 500 million made
by the cronies of Mian Nawaz Sharif be published. Let the people of
Pakistan know the names of the rats which jumped the ship before the
State Bank freezing order.

The unkindest cut of all has been the day light robbery of the
fundamental rights of the citizens. There is no constitutional nexus
between the provisions of article 232 and the proclamation of
emergency. In one nuclear strike the peasants and workers, the
intellectuals and businessman, the minority and women have been
deprived of their inalienable right to life, liberty, property,
freedom of expression, association and all the rights associated
with a civilized democracy. The power of Supreme Court of Pakistan
for the enforcement of fundamental rights under article 184 has been
curtailed. The power of the High Courts under article 199 for the
enforcement of the fundamental rights enshrined under article 8 to
28 of the constitution suspended. In short we are living in a police
state under civilian martial law.

A state where the regime is involved in a criminal conspiracy
against its own people.

Where the cream of the political clan has been branded in one sweep
of the pen as drug suspects.

Mr. Speaker, Sir,

I had warned last year that there are hard times ahead. Only a
national government can deliver the goods. It is quite evident from
the track record of this myopic, selfish, brutish and vindictive
regime that it has neither the will nor the vision to respond to the
challenge that lies ahead. At a time like this when England was in
the grip of economic recession, the only way out was the formation
of a national government in 1931.

Let us remember that a nuclear power has greater responsibilities.
Having achieved nuclear parity with India, let us now free ourselves
of the Indian Chain. For 50 years we have remained chained to what
India did. For 50 years, our only goal was to react to India.
Nuclear parity frees us from such ties.

We should begin negotiations to sign the CTBT. Let us take the
initiative, let us act and not just react if we are to overcome the
danger that faces us.

Now that aid has dried up. We can no longer afford the old
lifestyle. People are angry because hospitals do not have medicines,
schools do not have books, streets are broken and water is not
available.

We tell the people that this is due to the extravagant lifestyle of
the Rulers. Or that it is due to corrupt politicians and
bureaucrats. We don’t tell them aid has stopped.

We should have the courage to say:

That we borrowed too much in 50 years believing there was no
tomorrow.

That we produce too many people and have one of the highest
population rates in the world.

That three wars over Kashmir have forced us to spend significant
amounts on defence.

Whatever Pakistan earns, it goes on debt and defence. There is
nothing left.

As long as we borrow for Motorways and refuse to spend on water
logging and salinity, on Health, Education and Population, we cannot
prosper.

Nuclear parity has forced issues into the open. Either we have the
vision or maturity to deal with these issues or else a sea of people
seething with hate will erupt in our country sooner than later.

Lahore: July 21: A spokesman for Pakistan Railways, commenting on
the transportation of Messrs Ittefaq Foundries’ steel scrap from
Karachi to Lahore; disclosed here on Friday morning that Pakistan
Railways has a capacity of running an average of 12 goods trains
from Karachi to other parts of the country every day.

The PR, he said, was bound to give priority to essential commodities
and perishables for the national good.

The spokesman, giving the break-up said four trains of imported
wheat, five of kerosene, furnace, diesel oil, petrol and edible
(vegetable) oil, one train of cement from Hyderabd, one of other
miscellaneous essential items and one of bonded containers for
Lahore Dry Port were running from Karachi every day.

He said railways were providing one train daily for the
transportation of imported phosphate fertilizer by withdrawing it
from one of the above stated break-up because the fertilizer is
essentially required for the sowing/planting of the Kharif crops.
Delay in transportation of fertilizer would badly affect the small
farmers who can not afford to store it.

He further said that railways had to give top priority to the
movement of imported wheat from Karachi Port before the setting in
of the monsoon because the wheat would be badly damaged if moved in
the season, causing huge losses to the national exchequer.

He said that previously railways was bound to transport Ittefaq’s
scrap because it was bonded cargo and used to be customs-cleared at
Ittefaq’s own premises which was declared a “bonded ware-house” as a
part of Lahore Dry Port, a privilege not extended to any other
importer. Now, however, the customs producers of the scarp imported
by Ittefaq have to be completed in Karachi like all the other
importers. Railways, this have no obligation to transport Ittefaq’s
scarp and they could use other modes of transport like every body
else.

The spokesman said that railways had to bear a loss of approximately
Rs. 200,000 per train (of about 60 wagons) for the transportation of
Ittefaq’s scrap because of the special concessional fare allowed to
them.

He said that railways were national service and no one company or
group had any right to use it for their personal gain.

Concluding, he said that the present pressure tactics of the Ittefaq
management amounted to blackmail and a threat to security. Trying to
block the railway track was subversion in law and the railway would
deal with it according to Law. There was no question of submitting
to blackmail, he added, - PPI

ANNEX-II Cotecna denies violating any law
DAWN
June 11, 1998

Islamabad, June 10: Cotecna Inspection S.A denied that any of its
employees had violated any law of Pakistan.

“We wish to categorically state that no company employee has ever,
directly or indirectly, committed any action which does not
scrupulously respect national and international laws, as well as
recognized practice in international trade and industry”, it further
stated.

According to a Press release faxed to Dawn by Cotecna from Geneva
here, it said events that had occurred during these last days
concerning the case of Cotecna inspection S.A., needed
clarification.

“Our company, Cotecna Inspection S.A., has recently been implicated
in proceedings initiated in Switzerland upon the request of the
Pakistani Government. In this context, the management of Cotecna
Inspection S.A. has seen itself blamed for deeds linked to the
legitimate payment of commissions to its agent our company deplores
being the victim today of Pakistan’s internal political rivalries,
which overflow onto the international scene”, it said.

In Sept. 1994 Cotecna Inspection S.A., the clarification said, was
awarded a five year contract for the assessment of customs values of
Pakistan’s imports.

“This contract was unilaterally and illegally terminated after two
years when the new government took over”.

Those two years of operation brought to light uncollected customs
dues identified by ourselves in the course of our mandate and
amounting to over 650 million dollars”, the Press release said. It
added that this result had been audited and confirmed by
international auditors, Price Waterhouse.

“To the best of our knowledge, the new Pakistani government has, to
date, taken no measure whatsoever to correct this apparent fraud”,
it claimed.

Cotecna Inspection S.A said it confirmed its determination to
vigorously defend its interests and maintain its commercial policy,
which fully respects all ethical